Gross wages of SA government employees higher than other sectors combined

When this happens to a country it spells the end of the economy. South Africa is busy sinking under the weight of the public service.
This is the result of quasi-democracy when democracy is not really democracy.

Formatting, highlighting by Toxinews

BusinessLIVE
05 May, 2012 19:59

The government employs more than a fifth of formal sector workers in South Africa and pays its employees an average 34% more than the private sector does.

According to trade union Uasa's 2012 Employment Report, the average gross wages of government employees are higher than the average gross wages across all sectors in the Organisation for Economic Cooperation and Development (OECD), a group of mostly rich countries. Net wages after taxes in the South African government are higher than net wages in Germany, Sweden and Finland, on a dollar purchasing power parity basis.

The report showed government salaries account for more than 12.8% of GDP and, when the salaries paid by state-owned enterprises are added, it increases to more than 14.3% of GDP.

Mike Schüssler, economist at Economists.co.za, who compiled the report for Uasa, a multi-sector union with 73000 members, said on Friday the public sector has grown from 11% of total employment in 1970 to 22.8% today.

"This means SA has more civil servants than the total number of people employed in mining and manufacturing combined. We cannot have more people in the government than we have people producing things. This is apart from the fact that more people get an income from welfare than from employment," he said.

The state salary bill was about R382-billion last year, which could have paid for 19 Gauteng Freeway Improvement Projects.

Finance Minister Pravin Gordhan said in his February budget the public sector wage bill was the largest component of current expenditure. He allowed for only a 5% cost of living adjustment for public servants, excluding pay progression, in the 2012-13 budget.

The report states it is specifically the wages of unskilled and semi-skilled workers which are too high - in the government and private sectors. In the last 40 years the real unit labour cost in SA has increased twice as fast as the OECD's average.

"The cost of producing things in the rest of the world is falling, whereas in SA the cost of producing things is rising and that makes us less and less competitive," Schüssler said.

Stats SA will release unemployment data for the first quarter on Tuesday. The unemployment rate was 23.9% in the fourth quarter of last year.

"Overpaid, unskilled workers are keeping other people out of employment. Lower level civil servants in SA, like cleaners, earn more than teachers in India or Brazil," said Schüssler.

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